Next Generation Supply Management Defined

Menu

Daily Archives: May 5, 2010

A recent article in the CPO Agenda on what to do when the CPO gets a request for quote had a great guide on what you should to do when responding to a crisis that is worth a quick review. The five simple steps it put forth can mean the difference between a minor disruption and a major crisis. Simply put, these steps are:

Consult the Plans

Specifically, consult the internal response plan and the external communications plan. Then contact the communications team, who should be clearly listed in the communications plan, to update them on the situation, even if their services might not be required (which will be the case if you can catch and fix an issue before the product reaches the customer).

Arm Yourself with the Relevant Facts

What really happened? When? Where? Why? and How? (Who is irrelevant as you will have to take full responsibility.) Investigate until you have the answers, don’t make any statements based on guesses or unconfirmed information, and don’t be emotional when you make your report.

Don’t Comment Publicly Without Being Briefed First

If the products have reached the customer, or if the media has gotten wind of an internal issue and makes an inquiry, don’t respond without first reviewing the communications policy and contacting the communications team, and, if there are any legal implications, the legal team too. Even if you are the most qualified person to respond and have all the information, if you phrase something in a manner that could be misinterpreted, you could put your company in jeopardy.

Assess the Situation for What it Really Is

Sometimes it will just be a boy crying wolf in your organization when all it is a utonagan. Furthermore, as Rod Clayton of Weber Shandwick notes, you could be in danger of attaching more significance to a situation or comment and making it worse if you can’t apply good judgment on whether it poses a substantial risk or threat.

Takes Steps to Address the Issue

When something does go wrong, the company needs to take strong, decisive and corrective action, the details of which will of course depend on what the problem is. And if the product has reached the consumer, the action needs to be quickly and clearly communicated to the stakeholders, media, and public. In doing so, the company will need to show leadership in facing up to a challenge and working to solve it. After all, the public will often forgive a company if they feel it has acted well in trying to address the issue.

As per Sourcing Innovation‘s last strategy execution post, which outlined the secrets to successful strategy execution, successful strategy execution requires clear-cut decision rights and information flows, as per Neilson et al., and good business process mapping. Lean is not enough. Six Sigma is not enough. TPS / Operational Excellence is not enough.

While these are very useful methodologies — as they can be used to streamline processes and operations once the organization has mapped out its current processes, identified the gaps, and developed revised processes that it believes will get it to where it needs to be; they are not vehicles for strategy execution in themselves. The very definition of lean is to eliminate waste from a process. That means an existing process is required as a starting point — lean can’t be used to develop a process from scratch. Six Sigma is a management strategy designed to improve the quality of process outputs by identifying and removing the causes of defects and minimizing variability. That means that, by definition, it also requires an existing (or proposed) process as a starting point. The Toyota Production System, the precursor to lean — which a few companies have rebranded “Operational Excellence” in light of the recent Toyota scandal, was a system developed to design out overburden (muri) and inconsistency (mura) and eliminate waste (muda). Again, the assumption is that there is a starting process.

If it isn’t immediately obvious to an average high school student, it’s not clear enough

Have an action plan to get from the current state to the desired state.

Goals are not enough.

Have the tools and resources in place to implement the plan.

Make sure there is a process (such as lean, six sigma), process support (in the form of new systems and tools), and people ready to go (who must be given access to the support resources they need and trained in advance).